China’s Emerging Order

FROM N.C.’S WRITINGS

Visiting China for the fourth time in thirty-six years does not make it dull or monotonous by repetition. Particularly today when Deng Xiaoping at the advanced age of 88 is leading a phenomenal drive for modernisation and opening up of the most populous country in the world.

No doubt the question of Deng’s succession will be an item of concern when the Chinese leaders meet in their next Party Congress towards the end of the year. From all accounts, there is cohesion in the leadership, though of course there are varying assessments of respective importance between the Party General Secretary Jiang Zemin and Prime Minister Li Peng. Incidentally, Zhao Ziang, who was removed from the Party leadership for having been tolerant to the Tiananmen demonstrators in 1989, still continues to be “within the Party” as stated by Jiang Zemin in a recent press interview. It will, of course, be difficult to forecast how the Chinese Communist Party will emerge after Deng. The position of pre-eminence that he holds today as the architect of the modernisation drive is undoubtedly unmatched although he occupies no official position and is known as the “senior leader”.

Leaving aside the question of personalities, what needs to be emphasised is that the Chinese leadership is bent on bringing about the modernisation of this ancient country with the Communist Party retaining the helm; and insist that this modernisation drive is consistent with adherence of Marxism. It is in this background that one would gather some impressions of the visit of the President of India to the four cities of Beijing. Xian, Hangchow and Shanghai. The impression could be gathered mainly through conversation with new acquaintances as also old friends.

How does China today look at the world? Formally, it is one of the five permanent members of the UN Security Council and is conscious of having entered this exclusive club of the great powers. Realistically, however, China takes into account the transformation in the world scene following the end of the Cold War. Particularly the shift in the balance of forces consequent upon the collapse and disappearance of the Soviet Union is taken with utmost seriousness by the Chinese authorities. In a recent interview to the world press, the Chinese Foreign Minister, Qian Qichen, clarified: “A new world pattern will depend on the development of the situation. It is likely to be a multipolar pattern. That is to say, the world is diversified with many different forces. Economically, for example, North America, Asia and Europe represent different forces. Thus, the world is unlikely to be a unipolar pattern, or in other words, one superpower cannot monopolise international affairs and dominate the world. It most likely will be a multipolar world.” What is very significant is the Chinese Foreign Minister’s forecast that with the end of the bi-polar world pattern, a new world war cannot happen.

Beijing’s appraisal of the world scene today is that it is favourable for China to undertake major reforms, particularly in its economy, so that it can emerge as really strong enough to be a decisive force in international politics. In its assessment, there is stability in the Asia-Pacific region, and taking into account the phenomenal stride registered by the neighbouring South Korea, Thailand, Malaysia, Singapore and Indonesia, it claims, as its Foreign Minister did, that East Asia today is “the most dynamic region in the world economy”. It is in this background that China emphasises its good neighbourly relations. And beyond the neighbourhood, Qian Qichen visualises China’s prospects: “The developed countries which have been perplexed by economic recession and sluggish recovery cannot afford to ignore the huge market of China.”

It is against this context of the Chinese leadership’s understanding of the world scene that one has to take into account both the economic thrust and the foreign policy perspective of China today.

IN the field of economy, China is passing through a boom. The reform movement, started thirteen years ago by Deng Xiaoping with his call for Four Modernisations in 1978-79, has now reached a new stage. Modernisation is accompanied by opening up of the economy, while at the same time, the agricultural sector has been given an equal boost. The average annual rate of growth in the decade of the eighties has been nine per cent in real terms, in which agriculture registered a little over six per cent and industry over 12 per cent. The per capita income has doubled in this decade. The magnitude of the opening up of China’s economy can be gauged from the fact that the volume of exports rose from 18 million US dollars in 1980 to 62 billion in 1990. As much as 70 per cent of exports consist of manufactured goods, in which capital goods account for 34 per cent. Another index of China’s economic health is that its external debt service ratio is as low as nine per cent. It needs to be noted that China so far has contracted no loan from the IMF. Foreign capital is being attracted on a large scale. In operation already are 17 thousand overseas-funded enterprises in China with a total of more than 23 billion US dollars already invested, while the contracts signed are for 51.4 billion dollars for a total of 41 thousand units.

In the first phase, the bulk of foreign invest-ments were concentrated in the Special Economic Zone, where the terms offered were extremely liberal. One can say these turned out to be pockets of capitalist culture. What is worth noting is that the overseas Chinese component in China’s foreign investment is understood to be over seventy per cent. The period of 1978-1991 was regarded as the austerity phase of the reforms. This phase was over by the end of 1991.

In January this year, Deng Xiaoping personally launched a new drive for economic reforms touring the southern provinces. His speeches during this tour are regarded as the new bible for economic reforms and opening up to the world outside. Good management and excellence in quality are stressed throughout. A sample of this new experiment is provided by the scheme to develop the Pudong New Area, adjacent to China’s most developed metropolis of Shanghai. The significance of Pudong lies in the fact that all the facilities and preferential policies so long bestowed on the Special Economic Zones are being made available at Pudong, without its being cordoned off as a Special Zone. In other words, the Pudong experiment is meant to test out the capacity for the economy as a whole to absorb and assimilate the economic pattern and culture of the Special Economic Zone.
The planners of China’s economy have set to develop Shanghai and its environment as the country’s foremost economic, financial and commercial centres. The Secretary of the Shanghai Committee of the Communist Party, Wu Bangguo, observed: “We should give full play to Shanghai’s overall advantages of its science, technology and economy, and energetically develop a new generation of hi-tech industries and pillar industries in order to promote the development of Shanghai’s overall economic construction. Pudong’s standard should be of the 1990s and of the twentyfirst century.” In fact, as one goes south from Beijing, particularly after crossing the Yangtze river, one cannot help noticing the phenomenal spurt in economic development as compared to the North.

Seventy per cent of China’s population live in the village, and the uplift of the rural population has never been neglected. With all the travails and turbulence of the last four decades, modern China’s economic foundations were laid in the fifties with the sweeping agrarian revolution that brought about the most effective land reforms which, as a natural corollary, initiated nationwide literacy. The awakening of the peasantry nurtured under Mao tse Tung is the key to China’s economic development. Even under the ill-conceived commune system, the rural economy stood its ground and generated domestic savings which made no insignificant contribution towards paying for industrialisation and in bringing about technological modernisation. The Chinese nowadays speak quite frankly, and one finds out that the number of people below the poverty line is estimated to be less than one-and-a-half crore, out of the total population of 120 crores.

Apart from the general well-being prevalent in the countryside as a result of the agrarian reforms in which social security benefits are ensured—such as housing, education and health-care—one of the outstanding features of China’s economic planning is the development of what is called the Township-cum-Village Enterprises, in which as many as ten crore people are employed, and which contribute as much as 30 per cent of the total manufactured exports. This sector is financed largely out of its own savings and also out of the informal credit market.
All this implies a level of decentralisation which is often missed in assessing the strength of the Chinese economy. Not only the far-flung nature of China’s topography but the very evolution of China’s political culture—with the Communist Party taking its rebirth in the thirties in the countryside and the legendary Long March—there has been a limit to centra-lisation which accounts for the special characteristics of the polity of modern China. The roots of the Chinese politics have always been embedded in the vast rural countryside, and this is maintained even in the midst of the Tremendous drive for modernisation.

THE Chinese leadership, however, seems to be aware of the social impact of all the reforms drive. Although the rate of inflation is somewhere between two and three per cent, the fixed income groups are feeling the pinch. Side by side, a class of newly rich has surfaced in the urban centres, thereby sharpening social disparities. While modernisation as a whole is encouraged—miniskirts are a common sight in the cities—there is vigilance on the question of negative impact of the Western-model affluence. On this score both the Party and the government are watchful. For instance, a new draft law to crack down on bribery and embezzlement is being brought before the Standing Committee of the National People’s Congress, while the main task before the Supreme People’s Procurator is now earmarked for combating these anti-social practices, more than political dissidents.

It is worth noting that in every major discussion that President Venkataraman had with the Chinese leaders, the elaboration of the strategy of rapid economic reforms was invariably combined with emphasis on social stability.
The Communist Party General Secretary, Jiang Zemin, for instance, explained that China’s programme of reform would be undertaken “only under condition of maintaining social stability”.
On this point, it is worth noting the observation of the editor of the prestigious Beijing Review: ‘The difference in reform between China and the former Soviet Union lies in the fact that China did not first undertake political restructuring. Instead it introduced reform of the political structure steadily as economic structural reform was deepened, its door opened wider to the outside world and its modernisation process forged ahead.”

This is precisely where the tragedy of the Tiananmen (June 1989) comes in. Modernisation brought in the urge for democratisation on the Western model. Although the old curbs have been visibly removed, discussion on the Tiananmen episode is still done with caution. As a senior Chinese official observed in confidence, there has been freer discussions in the People’s Congress and the People’s Political Consultative Conference, and there is more emphasis on legislative measures to curb authoritarian trends. Besides, the emphasis on decentralisation of powers—both administrative and financial—is expected to meet the demand for more democracy.

What is also noticeable is a persistent campaign to mobilise the scientists and engineers for the new economic system. The emphasis on R&D is conspicuous. The question still persists as to whether the pace of rapid modernisation of the economy will not force the pace of democratisation, without creating an explosion like the one at Tiananmen in 1989.

In the context of the anxiety to maintain stability, one has to take note of two specific areas of concern before the Chinese leadership. These are Tibet and Xinjiang. Regarding Tibet, it is evident that the Chinese leadership fears that the Western powers will step up stoking unrest, if not upheaval, by openly backing the Dalai Lama. And by raising a worldwide campaign against the violation of human rights, prepare the ground for some form of intervention in Tibet and thereby try to disrupt the integrity of the Chinese republic. Hence, the repeated publicisation of the official Indian stand that it would not permit any anti-Chinese political activity on the part of the Dalai Lama from the Indian soil. Such publicity of the Indian official stand is meant to demoralise the Dalai Lama’s circle both in India and abroad. At the same time, to meet the attack of the Human Rights lobby, it publicised Chinese Prime Minister Li Peng’s offer to talk to the Dalai Lama on all subjects except the question of Tibet’s secession from China. So far there is no palpable move for such talks on either side.

On the question of Xinjiang, the Chinese authorities are well aware of the state of near-hostility that prevails between the Han element of the population and other ethnic groups, particularly, the large Uigur population. The collapse of the Soviet Union and the emergence of independent republics of Kazakhstan, Kyrgyz-stan, Turkmenistan, Tajikistan and Uzbekistan, have created the danger of the infection of the demand for independence or secession spreading to the ethnic groups in Xinjiang and inner Mongolia. To pre-empt such a danger, Beijing has taken an active policy of establishing friendly relations with the governments of these neigh-bouring republics, offering them attractive economic cooperation. As an immediate measure, this might work. However, internal unrest in Xinjiang persists, as recently reported by the Governor of the province.

WITH the assessment that a multipolar world is emerging after the bipolarity of the Cold War, the Chinese Government has of late been laying stress on cultivating the new centres of world power, namely, Germany and Japan. The European Community is being carefully cultivated as could be seen from Li Peng’s recent visit there. There has been a certain hitch with France because of its move to sell Mirage 200 to Taiwan, but this is not expected to halt trade with China. As for Japan, General Secretary Jiang paid a visit to Japan this year—”a thousand-li journey is started by taking the first step” as a Chinese proverb goes. While the present Japanese investment in China is small—about one per cent—as much as 20 per cent of China’s foreign trade is with Japan. Japan imports more raw material goods from China, which is insisting on the lowering of tariffs on the Chinese goods. On the transfer of technology. Japan is constrained by the Cocom embargo and also the fear that China might outstrip Japan in the event of an open-door policy. Some of these points were discussed during Jiang’s visit, and the feeling in Beijing today is that the prospect of economic cooperation with Japan will substantially improve in the immediate future. On the agenda is the proposed visit of the Emperor to China, with the significant report that Beijing is not insisting on his tendering apologies for all the devastation wrought on China by the Japanese Army from 1931-1945: the matter is specifically left for the Emperor to decide. On Japan’s part, the big Chinese market of over a billion people next door is too tempting to be neglected.

With regard to the USA, it would be a superficial view to say that China is engaged in a love-hate relationship. There was certainly pressure on China during the visit of the US Secretary of State, Baker, to Beijing last November. This was followed by Premier Li Peng’s meeting with President Bush during the UN Security Council Summit in January. After the sanctions following the Tiananmen incident in 1989, the USA became cautious and the Most Favoured Nation term was extended to China mainly because any embargo would hit the large and expanding US investment in China while the US domestic market would be hit by any such embargo. It was a decision dictated by the pure economics of self-interest on the part of Washington. Baker’s talk centred mainly on the control of rocket technology export (MTCR) and on China signing the NPT. Whether actually China has stopped supplying rockets to Syria and other Middle East countries needs to be verified.
While announcing its adherence to the NPT, the Chinese Foreign Ministry statement made clear its stand: “To attain the lofty goal of complete prohibition and thorough destruction of nuclear weapons, countries with the largest nuclear arsenals should earnestly fulfil their special obligation by taking the lead in halting the testing, production and deployment of nuclear weapons and drastically reducing those weapons of all kinds they have deployed inside and outside these countries.”
While disclosing its magnum-size under-ground test on May 22, the Chinese Foreign Ministry took the position that the number of tests China has conducted is “very limited and the smallest among the five nuclear powers”. And then it reiterated: “China is in favour of complete prohibition of nuclear tests within the framework of effective nuclear disarmament and will continue to work to this end.”
This brings one to the question of the objective of the May 22 nuclear test. It would be absurd to think that its occurrence during the President of India’s visit to China was in any way to put India into unease. President Venkataraman was right in saying that the test was an internal matter of China. However, it can certainly be argued that the Chinese authorities could on their own have informed our President about the nuclear test, since they are known to be meticulous about correct protocol etiquette.

From the comments of the Chinese Foreign Ministry it is clear that the nuclear test was meant, first of all, to tell the other nuclear powers, loud and clear, that they should have no illusion to treat China as of little consequence even in the sphere of nuclear weapons monopoly by one or a handful of powers.

Secondly, the blast was meant to assure the Third World that there was no need to be over-powered by the might of the USA or the club of the North, that China as the leading power of the South can stand up to such bullying from the North.
Thirdly, the mega-blast was perhaps meant to impress upon the Chinese people themselves about the strength of the country’s technological prowess, that there is no reason to be over-whelmed by the posture of the Western might—an antidote to guard against being swept off in the integration of the globalisation.

IT is important to note that Beijing today is making a determined bid to be part of the Third World. Its decision to enter the NAM is in contrast to its rather condescending attitude towards the movement in the sixties and seventies. And in this refreshingly positive approach to the Third World, there is a distinct emphasis on building amity and goodwill with India. As the common theme during President Venkataraman’s visit, the Chinese leaders repeatedly emphasised that India and China together, constituting two billion of the globe’s population, can contribute to the shaping of Asia’s destiny and be a decisive force in the world. There was repeated reference to the Five Principles of Peaceful Coexistence, of which Nehru and Zhou Enlai were named as the authors, and which, as Jiang Zemin put it, should form “the foundation for the creation of a new international order. No country should attempt to establish its own domination or to indulge in strong-arm politics.”

Even as rhetoric this was missing in Chinese diplomatic vocabulary since the fifties. Its revival now is significant as pointing to the present foreign policy approach of China. In the sixties and seventies, the Chinese policy towards the Third World excluded India—rather it sought to quarantine India. Today, there is the realisation of the imperative of cultivating India in the bid to rally the Third World. There is no visible indication of any move to play off Pakistan against India. The Chinese stand is that the question of Kashmir needs to be settled as per the Shimla Accord, though while in Pakistan, the Chinese leaders are reported to have mentioned the UN resolutions as well, provided they are acceptable to both the parties.
Coming down to the immediate issues of India-China relations, the Chinese leadership lay stress on economic cooperation, with repeated emphasis on exploring the possibility of joint ventures, even in the third countries. On the vexed issues of the border, the question of settling the disputed claims is left to the Joint Working Group, with a clear understanding that it would take a long time to settle. Meanwhile, the immediate emphasis is on ensuring peace and tranquillity on the present border, for which confidence-building measures are being considered. The significant item in this list of suggested measures is force reduction and withdrawal to eliminate the present eyeball-to-eyeball position. To avert any military clash along the long border, the facilities for constant and closer interaction between field commanders at the local level is also being considered.

There need to no illusion that the Chinese authorities today would deviate from the time-tested principle of international relations that there are no permanent enemies, nor permanent friends, but permanent interests. In the changed world of today, with the international environ-ment in a fluid state, the urgency of consolidating India-China relations can hardly be emphasised. In this important context, there could possibly be no two opinions about the positive contribution made by President Venkataraman’s visit to China—the first to have been undertaken by a head of the Indian republic to the largest of our neighbours.

[Originally despatched to The Telegraph, Kolkata, appeared in Mainstream (June 6, 1992)]